Reliable Funeral Service, Inc. v. Cruz

1 Guam 626

• Court: Superior Court of Guam
• Decided: July 26, 1979
• Docket: Civil Case No. 910-78
• Status: Published

Opinion

ABBATE, Presiding Judge

DECISION AND ORDER

This action came before the Court for trial on May 31, 1979. David Shapiro appeared on behalf of the plaintiff and Frank Lujan appeared on behalf of the defendant. The matter was heard before the Honorable Paul J. Abbate and decision was reserved.

On February 28, 1977, the plaintiff and the defendant entered into a Funeral Security Plan contract. This plan provided for the defendant or a member of his family a casket plus funeral services. The value of the above-mentioned casket and funeral service was approximately $1,450.00. Subsequently, after making $160 in payments, the defendant defaulted on the agreement. Shortly following the death of Maria T. Cruz (wife of defendant), the plaintiff approached the defendant concerning possible funeral arrangements for his wife. The plaintiff was willing to provide a casket along with funeral services for the value of the original contract less the $160 received. So the plaintiff was offering to provide the funeral for about $1,290.00. The defendant, however, wanted a more expensive casket ($350 more) than that covered in the original plan. The defendant did not manifest any desire for increased services. Under the original plan services amounted to $900.00. Eventually, the plaintiff acquired $500 from the defendant and the defendant’s signature on a contract for a $2,775 funeral. The above contract provided for a $900 casket with $1,875 in services.

The defendant signed the second contract without reading it as he is unable to read due to lack of formal education. Consequently, the defendant signed the second contract believing the contents to be something different than what they actually were. The defendant was under the mistaken impression that he was contracting for the services offered in the original plan, which had a cost of $900.00.

The holding of the Court is that the contract, entered into by the plaintiff and the defendant on November 21, 1978, be reformed to express the true intention of the parties. Accordingly, the defendant should not bear the extra cost for the services indicated in the second contract. Instead, the defendant is liable for the services offered in the original plan.

Guam’s Civil Code, § 3899, lists various situations in which a contract may be reformed or revised to express the intention of the parties. The three situations listed are fraud, mutual mistake, and a mistake of one party, which the other at the time knew or suspected.

The basis for reformation in this case is the mistake of one party which resulted in a contract which does not express the intention of the parties. At the time the plaintiff entered into the second contract with the defendant, he knew or should have known that the latter was under the mistaken impression that the only difference in the original and the later plan was a change of caskets. The more than 100% increase in the funeral service cost was solely attributable to the plaintiff’s actions. The defendant expressed a desire only for a more expensive casket and he believed that this aspect of the contract would be the only significant deviation from the original contract.

Being illiterate, aged, subject to obvious emotional infirmities, and inexperienced in business and financial matters, it was apparent that the defendant would be unable to ascertain that he was signing a document which did not represent his true intentions and agreement with the plaintiff.

In addition, in a similar situation it was determined that the aggrieved party may be said to have executed the contract through “unconscious ignorance” within the meaning of § 1577 of the Civil Code concerning mistake of fact. Moore v. Copp, 119 Cal. 429 (1897).

For the reasons given above, the Court hereby orders that the contract of November 21,1978, between the plaintiff and the defendant be reformed in the following manner:

U.S. metal casket (open) $ 900.00

Service 900.00

Grand Total $1,800.00

Less pre-paid payment (160.00)

Less down payment (500.00)

Unpaid Balance $1,140.00

It is SO ORDERED.